2. In order to determine the average amount spent in November on Amazon.com a random sample of 144 Amazon accounts were selected. The sample mean amount spent in November was $250 with a standard deviation of $25. Assuming that the population standard deviation is unknown, what is a 95% confidence interval for the population mean amount spent on Amazon.com in November?

3. A shipment of 20 DVDs has arrived at a video rental store. Based on past experience, the manager knows that 10% of all new DVDs sent to the store have a visible defect. The manager tells you to begin inspecting the new DVDs one at a time at random until you find the first DVD that has a defect. If 10% of the DVDs have a visible defect in the new shipment, what is the probability that the first DVD that has a defect is the 3rd one that you inspect? (Round your answer to 3 decimal places.)

.081

.268

.089

.716

4. An insurance agent has selected a sample of drivers that she insures whose ages are in the range from 16–42 years old. For each driver, she records the age of the driver and the dollar amount of claims that the driver filed in the previous 12 months. A scatterplot showing the dollar amount of claims as the response variable and the age as the predictor shows a linear regression line with: y^=3710 – 55.4x. If the age of a driver increases by 1 year, by how much and in what direction would the dollar amount of claims be predicted to change for the driver?

5. A researcher claims that the proportion of employees who play video games in the workplace is higher than it was 10 years ago. You might be willing to reject the null hypothesis of no change with a = 0.10 or larger. The p-value for this test is 0.15. In this case the researcher should

not reject the null hypothesis

reject the null hypothesis

continue with further testing because the result is inconclusive

change the testing from nonparametric to parametric

6. The general plan of major actions through which a firm intends to achieve is long-term objectives is called its

corporate plan

long-term goal

grand strategy

mission

7. How valuable a low-cost leader’s cost advantage is depends on

whether it is easy or inexpensive for rivals to copy the low-cost leader’s methods or otherwise match its low costs

how easy it is for the low-cost leader to gain the biggest market share

the aggressiveness with which the low-cost leader pursues converting the cost advantage into the absolute lowest possible costs

the leader’s ability to combine the cost advantage with a reputation for good quality

14. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager’s bonus if FIFO is adopted instead of LIFO?

15. The Sarbanes–Oxley Act of 2002 requires publicly traded U.S. companies to take the following actions to defect and prevent fraud:

Adopt accrual basis of accounting, maintain an adequate system of internal controls, and create penalties for noncompliance

Maintain an adequate system of internal controls, ensure that internal controls are reliable and effective, and hire independent auditors to attest adequacy of internal controls

Ensure internal controls are reliable and effective, corporate executives must independently review internal controls, and submit all financial statements to the Public

Company Accounting Oversight Board

Maintain an adequate system of internal controls, provide additional training to managers and accountants regarding internal controls, and publish internal controls on the company’s public website

16. On July 1, 2014, Linden Company purchased the copyright to Norman Computer Tutorials for $140,000. It is estimated that the copyright will have a useful life of 5 years. The amount of amortization expense recognized for the year 2014 would be

17.ABC Corp. receives a 7-month interest-bearing promissory note in the amount of $360,000 on February 1. The interest rate is 15%. What is the total interest expense ABC Corp will record assuming ABC makes all of its payments?

$54,000

$31,500

$4,500

$36,000

18. Logan Corporation issues 50,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to cash for $3,000,000 and a credit or credits to

preferred stock of $3,000,000

preferred stock for $2,500,000 and paid-in capital in excess of par value—preferred stock for $500,000

20.The Sarbanes–Oxley Act of 2002 requires publically-traded U.S. companies to provide great internal controls. The five primary components of an internal control system include: a control environment, risk assessment, information and communication, monitoring, and